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Canadian markets continued to struggle this week, after hitting a 52-week high last Friday. A sharp drop occurred on Wednesday as Canadian CPI data showed a rebound in inflation in December 2023, as the annual headline inflation rate came in at 3.4% while core inflation measures rose unexpectedly, leaving economists split on when to expect rate cuts. This news came as the Bank of Canada had just stated that Canadian inflation expectations were coming down. It appears that there’s still a long way to go before the Bank of Canada feels confident that inflation will reach its two-percent target and that the Canadian central bank now likely won’t cut rates until mid-summer and will likely wait until the U.S. Fed acts on rate cuts.
In the U.S. Monday was Martin Luther King Day and markets were closed. On Wednesday, rather than reaching all-time highs, stocks joined losses in risk assets as bond yields climbed on speculation the Federal Reserve will be in no rush to cut interest rates as the economy still shows too many signs of resilience. U.S. Treasury two-year yields topped 4.3%, the 10-year is more than 4%, and the dollar rose 2.12% year-to-date. The U.S. Congress has managed to pass legislation to fund the government through early March despite political tensions, thereby avoiding a partial government shutdown on Saturday. There are a limited number of opportunities to continue this process before the election. It will not be good for anybody if the government is facing a shutdown when the polling stations open.
Overnight numbers from China showed weaker retail sales and continuing property-market erosion. Christine Lagarde, President of the European Central Bank (“ECB”), faced with market expectations for rate cuts as soon as March or April and a bank meeting next week, underlined the ECB’s intent to keep its benchmark rate high for “as long as necessary” until it’s clear that inflation is back to the goal of 2%. European inflation rates rose in December 2023, rebounding after a series of seven monthly declines.
Commodities were hit by the unexpected strength of the U.S. dollar; the U.S. dollar index (DXY) is at a high for the new year. Gold lost $50/oz to $2,004 on Wednesday but held above the $2,000/oz psychological barrier moving to $2,023 Friday morning. Silver dropped to $22.40/oz but today sits at $22.50.
Base metals are still on a downtrend. Copper has lost 3.3% this year, at $3.74/lb. Aluminum, Lead, Zinc, Nickel, and Iron were all in negative territory for the year.
Battery materials continued to be lower with Lithium trading at $13.27/kg, prices last seen in 2021, and Cobalt flatlined at $13.22/lb. as continued negative news about EV sales was reported.
Petroleum has been holding in the low $70s/bbl, with WTI at $74.30/bbl today being the high for the year, as Middle East tensions and oil output disruptions caused by cold weather in the U.S., the world’s biggest producer, balanced concerns about the health of the Chinese and global economies.
Uranium has continued its run–up from less than $50/lb. a year ago to breakthrough to $ 106.50/lb. this week. Global demand for Uranium is forecasted to reach 209 million pounds of U3O8 by 2035. While demand is expected to grow constantly, as nations look to nuclear as the “Green” option, global supply of Uranium continues to drop. New production assets are required to fill that supply gap.
Continuing volatility and sectoral weakness seem to be the order of the day so far in 2024, and it may take the first half of the year for things to settle, and growth to resume. Bears are everywhere and only a few Bulls can be found. The last time the small caps were this cheap it was a setup for a 12-year run in small caps. Keep the money working and stay invested in the opportunities that exist.
We are concerned that the revised Alternative Minimum Tax (AMT) introduced in the 2023 Federal Budget, which became effective Jan 1st, 2024, may significantly reduce the effectiveness of the flow-through regime and the successful Critical Mineral Exploration Tax Credit, putting thousands of high-paying jobs in rural and remote communities at risk, as well as lowering donations to significant social aid organizations.
Take action to protect Critical Mineral Exploration & Flow-Through Investments: Letters requesting review and revision of this provision should be addressed jointly to the Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance, the Hon. Jonathan Wilkinson, Minister of Energy and Natural Resources, and cc your local MP. Get more information on the letter writing campaign here.
It has been a good week for our clients, including our new client StickIt Technologies Inc., and we are pleased to present to you our round-up of their news released between January 15-19, 2024.
Technology
On January 16, 2024, Visionstate Corp. (TSXV: VIS) CEO John Putters appeared on an “Investor.Coffee” interview with host Tracy Weslosky and discussed the growing need for effective cleaning protocols to prevent disease outbreaks and how WANDA™ has the potential to change standards for facility management cleanliness from airports to restaurants. The footprint of the WANDA™ smart device now extends to hospitals, airports, shopping centres, universities, and other public facilities across and beyond North America.
Visionstate IoT Inc., a subsidiary of Visionstate Corp., has entered into a three-year deal with Bunzl Canada Inc. to distribute Visionstate’s WandaNEXT product in Canada, Australia, and the UK. Visionstate IoT will manage direct sales of WandaNEXT in the U.S. through its internal sales team. WandaNEXT, the flagship product of Visionstate, is an innovative AI-driven application widely utilized across various sectors to monitor and enhance cleaning protocols, thereby improving overall efficiency in building services.
This partnership is a strategic move for Visionstate, positioning it for further expansion in the international facility-management sector. The contract is anticipated to increase Visionstate’s existing revenue stream.
Watch the interview here.
Our Newest Client
Cannabis
On January 16, 2024, StickIt Technologies Inc. (CSE: STKT),an Israeli technology and cannabinoid company that serves customers worldwide, announced that it has retained CHF Capital Markets Inc. (“CHF”) and Independent Trading Group Inc. (“ITG”) effective immediately.
StickIt Technologies Inc. operates as a cannabis company. The Company offers smoking utensils made from condensed cannabis oil in a specific matrix that gives the product its rigidity, similar to a toothpick, which can be easily inserted into any regular cigarette.
The CHF services agreement for investment community outreach, corporate communications, and digital marketing is for a 12-month period with quarterly reviews and may be subject to termination with two months’ notice. Under the terms of the agreement, which is subject to the Canadian Securities Exchange (CSE) approval, CHF will receive a monthly retainer, reimbursement of any expenses incurred, and an incentive stock option to be made available with terms similar to those of Directors and Insiders.
ITG will trade shares of the Company on the CSE/ NEO/ TSXV and all other pertinent trading venues with the objective of maintaining a reasonable market and improving the liquidity of the Company’s common shares. The agreement is for an initial term of three months and will renew for additional one-month terms unless terminated.
Save the Date
Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) will be participating as an Exhibitor at AME Roundup 2024! If you are attending on Wednesday, January 24th, or Thursday, January 25th, you are invited to visit them at Booth 1501 to learn about the exciting exploration plans at Moosehead and Fleur de Lys, in Newfoundland for 2024.
Register now at roundup.amebc.ca.
CHF Capital Markets is Canada’s longest-established capital markets and investor relations firm, serving an international portfolio of NASDAQ, TSX, TSX Venture, and CNSX-listed companies across all sectors and market cap sizes.
Our team consists of high-profile communications and investment industry specialists who provide individually crafted solutions for clients operating in a broad range of industries providing comprehensive representation to the investment community as a separate, complete, and comprehensive outsourced IR department
.CHF’s reputable IR services include:
Provide prompt and credible information to existing shareholders
Outreach continuously to expand shareholder and financial community interest
Manage financial community expectations so that actual performance can exceed the anticipated
Manage the mechanics of IR service seamlessly so that Management’s time is not wasted on routine tasks
Manage social media presence
Let us get your story heard!
For more information please contact:
Cathy Hume, CEO
T: +1-416-868-1079 x 251
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